Cellphone contract crackdown sought by watchdog

Canada’s competition watchdog told the broadcast regulator how it would overhaul cellphone contracts, including doing away with hidden fees and misleading claims designed to make it harder to switch carriers and keep prices high.

In a submission to the Canadian Radio-television and Telecommunications Commission, the Competition Bureau laid out changes it would like implemented in the telecom industry.

Canadian consumers have long complained about industry practices, including misleading claims and onerous processes that make it harder to get out of a contract and go elsewhere for cellphone services.

“Discouraging the creation of switching costs that tend to reduce customer mobility, and effectively encouraging the provision of sufficient information to enable informed consumer choice, will allow Canadians to enjoy the beneficial effects of greater competitive forces in wireless markets, including lower prices, higher quality service and greater innovation,” the bureau said late Wednesday.

Public consultations planned

Last week, the CRTC issued a draft document that laid out the changes it is thinking about making to the wireless industry. That document will be the subject of public hearings next week, and the CRTC had asked for suggestions on it. Wednesday’s release by the Competition Bureau is a response to that request.

Among the practices the Competition Bureau would like to see disappear are long-term service contracts that compel staying in a bad deal. Not worrying about losing a customer keeps prices high and creates barriers to entry by new competitors, who can’t provide a real alternative unless enough people are willing to switch.

“If entrants cannot attract customers due to high switching costs, then these entrants may not be able to become effective competitors,” the bureau said in its submission, which came following the CRTC’s request for input by interested parties.

The bureau says an easy solution to that problem would be to limit how long contracts can go for. Canadian cellphone contracts regularly stretch for three years, but under European law, they can’t be more than two. Most U.S. wireless contracts are also two years, at most, in duration.

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The bureau took aim at the process of “locking” cellphones, whereby carriers make devices unable to function on rival networks, further ensuring a customer is less likely to leave.

“The bureau believes that device locking should be prohibited in the marketplace, and that service providers should be required to unlock any previously locked devices free of charge,” the submission said.

The bureau’s third suggestion to the CRTC is to limit cancellation fees. Under the current system, if a customer switches wireless carriers before their long-term contract expires, the previous carrier often tacks on exorbitant fees. Some entrenched players have been known to charge a $20 fee for every month remaining on the original contract.

‘Unlimited’ data plans can have limits

On the advertising front, the bureau would like to see a halt to the practice of advertising “unlimited” data plans that in fact have hidden limits. Currently, service providers have the ability to move a customer to a “limited” plan if they exceed certain usage limits.

At the very least, the bureau would like wireless firms to be clearer with customers about what happens if they go over certain usage levels.

The bureau also recommends that the CRTC review the industry every three years, to keep up with the rapid pace of technological change.

The bureau’s recommendations are non-binding, for the moment, and the agency will likely sit on the sidelines until it sees the outcome of whatever changes the CRTC ends up implementing.

But it’s the strongest statement the competition watchdog has made yet that it doesn’t like what it’s seeing in Canada’s wireless industry.

Patrick Brazeau in custody, kicked out of Tory caucus

Senator Patrick Brazeau is in police custody following an alleged domestic assault, sources tell CBC News, and has been removed from the Conservative Party’s caucus.

Brazeau, who has weathered several controversies since his appointment in 2009, will continue to sit in the Senate as an Independent.

It’s not clear whether any charges have been laid. Brazeau was arrested at 9:10 a.m. ET Thursday at his residence in Gatineau, just across the river from Ottawa.

Marjory LeBreton, the government Senate leader, sent a letter to Brazeau’s office and caucus members in the morning informing them of his removal.

“In light of the serious nature of the events reported today, Senator Brazeau has been removed from the Conservative caucus. As this is a legal matter, I cannot comment further,” LeBreton said in a statement.

Gatineau police were still working on their investigation at the home of Senator Patrick Brazeau early Thursday afternoon. Gatineau police were still working on their investigation at the home of Senator Patrick Brazeau early Thursday afternoon. (CBC)

A senior government source says Prime Minister Stephen Harper was saddened and shocked by the latest Brazeau developments, and took action immediately.

In question period, Harper called the matter serious.

“Obviously, Mr. Speaker, I think our understanding is that these are matters of a personal nature rather than Senate business, but they are very serious, and we expect they will be dealt with through the courts.”

Brazeau already under scrutiny

Brazeau was one of several senators who have come under scrutiny for claiming to live outside Ottawa while collecting a generous housing allowance.

Last November, a media report said Brazeau was claiming a Senate living allowance despite spending most of his time in the National Capital Region.

Senators can claim up to $21,000 a year if they live primarily more than 100 kilometres away from the Ottawa-Gatineau region. The report said Brazeau claimed he lived in Maniwaki, Que., but his primary residence is in Gatineau.

That report, along with reports that two other senators were claiming the allowance while already living in Ottawa, led the Senate to audit its members’ primary residences. The Senate board of internal economy has had senators turn over proof of residence, including health cards, driver’s licences and tax forms.

Brazeau said at the time that he was glad the Senate struck a subcommittee to look into the issue.

“I look forward to providing the facts that prove my primary residence is in Maniwaki, Que., contrary to what has been reported,” he said in an email.

“I built my reputation on the need for greater accountability, and I will continue practising what I preach.”

Known for boxing, verbal sparring

Among controversies Brazeau has been involved in include an episode last summer, when he took to Twitter to insult a journalist, rhyming her name with a demeaning word.

The journalist had reported that Brazeau had the worst attendance record in the Senate.

Brazeau has been criticized for his frequently colourful language on social media. He fought now-Liberal leadership candidate Justin Trudeau in a charity boxing match last March and lost.

Brazeau has also reportedly fallen behind on child support payments several times, with the most recent report saying the Quebec government garnisheed his salary to get the money. Brazeau said he is up to date with what he was ordered to pay.

Before he was appointed to the Senate, Brazeau was the head of the Congress of Aboriginal Peoples, the national organization that represents off-reserve aboriginals.

Recently, Brazeau was a vocal critic of the Idle No More movement, and made disparaging remarks about Attawapiskat Chief Theresa Spence’s recent hunger strike.

Ocado posts 11th consecutive annual loss but forecasts profit

The Hatfield-based company also said it was on track to start delivering from its second warehouse in Warwickshire this month, which will give it the potential to double its delivery capacity.

Ocado posted losses of £1 million over the year to November 25, on sales up 11% to £664 million. While this marked an improvement, it again raised questions about its costly and capital-intensive business model of picking groceries from a dedicated warehouse and delivering them over long distances to people’s front doors.

Philip Dorgan, analyst at Panmure Gordon, said: “2012 was another difficult year for Ocado. It failed to deliver accelerated sales growth and needed to raise money.”

Finance director Duncan Tatton-Brown said: “This year — before exceptional items — we have made a pre-tax profit for the first time ever.

“This business is on a trajectory and if we can continue on this trajectory it will lead to a profitable business.”

‘Stupid and venal’ Libor riggers have tarnished the City, says Icap boss

Icap is being investigated by the Financial Services Authority and has suspended one member of staff and put another three on administrative leave.

Spencer said he could  not comment on the investigation or the individuals.

He also declined to say whether United States regulators were involved, if Icap was already in settlement negotiations, whether the firm had made provisions against any fines or speculate on how long the probe may take.

But he said: “I want to make another point very clear: if we determine  that there has been any wrongdoing by any of our employees we will not hesitate to take extremely firm action against them.”

He added: “Speaking personally I am shocked, disappointed and saddened at the revelations that have emerged about Libor in recent months.

“It is deeply regrettable that the apparently stupid and venal activities of a few individuals have tarnished the reputation of the thousands of hard-working and honest people who work in City and banking in general and do so much to support the British economy.

“I am pleased that the FSA and other regulators are investigating this thoroughly and rooting  out any wrongdoing so that the industry can in time move on and be the better for it.”

His comments came a day after Royal Bank of Scotland was fined £391 million for its role in Libor fixing by regulators on both sides of the Atlantic.

Spencer said: “As I have said before, however, Icap is not a bank, it does not set or participate in setting Libor and has no financial incentive whatsoever in the level of Libor. I will say though that this is a matter we are taking extremely seriously. We are working with the FSA to understand exactly what has gone on.”

He said Icap had found no evidence that its brokers had been involved in so-called wash trades, that effectively cancel each other out but generate commission for the brokers.

Spencer said after a 13-per-cent fall in revenues in the final quarter of 2012 “there was a shaft of light in January, which we hope continues”.

Music industry reach ‘tipping point’ as quarter of Brits get music online

The British Phonographic Industry’s Digital Music Nation report, released today, found CDs are fast being replaced by hard drives and smartphones. In the UK, 27 per cent of people use legal download or streaming services to get their musical fix, while 19.6 per cent only consume music digitally. More than 40 per cent of all albums sold so far this year were downloads.

The report, which looks at the digital music landscape in the UK, said streaming services, such as Spotify and Napster, are contributing an increasingly large chunk of change to the industry, with the BPI estimating they pay around £50 million annually to record labels, around 15 per cent of digital revenue.

Many new artists, such as Ed Sheeran, have eschewed traditional promotional methods in favour of success on sites like Spotify. Sheeran’s song, The A Team, only reached number 101 in the singles charts but was the 17th most-streamed track on Spotify in the first 10 months of last year. The report also praised performers such as One Direction and Jessie J for their innovative use of social media and apps to promote themselves.

BPI chief executive Geoff Taylor said the findings were a sign the UK’s music industry had reached a digital “tipping point”, and added: “More affordable, capable and easy to use tablets and mobile devices are bringing more consumers to digital music for the  first time.”

Turnaround plan makes it sunnier for Thomas Cook

The world’s oldest travel group claimed
its turnaround plan was going to schedule as losses narrowed to £69.8 million
during the last three months of 2012, compared with  £91.1 million a year

The 172-year-old group has struggled over
the past few years with falling sales leading to a string of profit warnings.
It has been forced to renegotiate bank loans and make disposals to cut debt.

Analysts say the company has made steady
progress since Harriet Green took over as chief executive last May. Under her
stewardship, it has made a number of disposals to cut debt, including the sale
of its Indian business and several Spanish hotels.

Sales for summer holidays were up 4%
compared with 2012 while bookings in January were ahead 2%.

“We have seen stronger operating
performances in our major markets — the UK, Germany and the Nordics,” Green
said. “Although global economic conditions and consumer confidence remain challenged,
our business transformation is firmly  on track.”

Meanwhile, rival TUI Travel said it
expects to deliver full-year profit at the top end of forecasts as its losses
fell by £16 million to £93 million during the fourth quarter. It said summer
bookings were up 9% in the UK and 10% in the Nordics region.

Chief executive Peter Long said: “Across
all our key markets demand for the overseas holiday remains strong, despite the
overall economic environment.”

Vodafone squeezed as customers make better use of savings

A sharper-than-expected decline in UK revenues and continued fall in economically crippled Spain and Italy saw Vodafone’s overall revenues slump a greater-than-expected 2.6% in the three months to December.

“Our results continue to reflect very difficult market conditions  in Europe,” said chief executive Vittorio Colao. “The market in the UK is highly competitive.

“Our customers actually used more minutes in the last quarter but paid less for them. In the short-term that might not be good for our revenues but in the longer-term it is the right answer as we move people to Vodafone Red — our unlimited tariff.”

Colao said he would not comment on reports that the UK’s largest mobile company Everything Everywhere may be taken over with two rival private equity consortium lining up potential offers. However, he added: “Given how competitive the UK market is, I think it will have little effect who owns EE. But I watch events with interest.”

Vodafone left its forecasts for the year to March unchanged with operating profits between £11.1 billion and £11.9 billion.

In the latest quarter UK revenues dropped by 5.2% and even Germany saw a surprise 0.2% slip.

But in Italy revenues fell by 13.8% and in Spain by 11.3%. Emerging markets saw India grow by 9% and Turkey by 18.4%.

Oman ruler sets up $182m fund for entrepreneurs

Omani ruler Sultan Qaboos bin Said has launched a US$182m fund to help set up small businesses.

On top of financial backing, new small and medium business (SME) owners would be given land for free, helping them save on start-up costs.

Discussing economic policy with a group of about 300 Omani citizens during a visit to the northern town of Bahla, the Sultan said: “This fund will help young men and women with their projects. The initial capital of the fund has been set at OMR70m ($182m), which will be increased by OMR7m each year.”

The fund has been created in a bid to create a strong non-oil sector based on private companies which will also employ Omani job-seekers. The country’s economy is booming on the back of high oil prices, but has struggled to create new jobs for a young and growing population. Furthermore, oil production is expected to start declining later this year as Oman’s reserves are used up.

An entrepreneurial economy would mean the sultanate no longer relies on oil wealth, and the Omani ruler has taken to the road to explain and debate his economic strategy with local people beyond the royal court in Muscat.

The focus of his national tour is to describe the government’s attempts to boost employment by encouraging people to set up their own businesses. During his meeting in Bahla he ordered that news owners of SMEs be given state land for free, explaining that it would help them start with a “more competitive edge”.

He added: “The land will be for long-term utilisation, and we pray to Allah that our young men and women show interest in various business fields.”

In 2010 the International Monetary Fund estimated that unemployment among Omanis may have exceeded 20 percent. Inspired by the Arab Spring uprisings in the region in 2011, small-scale street protests took place in the country demanding jobs and more economic opportunities.

To address the employment issue, the government created new jobs for Omanis, with finance minister Darwish al-Balushi saying last month that 36,000 jobs were created in 2012, with an 56,000 due to become available in 56,000. About 20,000 of these would be in the civil service.

Foreign specialists hired to boost Saudi health services

Saudi Arabia’s Ministry of Health has hired 2,087 consultant physicians, with 1,364 recruited from abroad.

The wave of appointments has been made to improve health services across the country’s hospital, confirmed undersecretary for hospital affairs, Dr Aqeel Al-Ghamdi, with 723 health experts hired locally.

The rest of the specialists we brought to the kingdom from Australia, the UK Egypt, Jordan, Pakistan, Sweden and the USA, and will focus on areas including kidney transplants, bone surgery, neurosurgery, heart surgery, infectious diseases in children and newborns, diabetes, radiology and more.

Meanwhile, undersecretary for healthcare Dr Abdul Aziz Al-Humaidi revealed some startling statistics at the opening of the fourth annual scientific nutrition education and health indicators programme in Riyadh on Wednesday.

He said 24 percent of women and sixteen percent of men are obese in the Kingdom, which could lead to heart disease, blocked blood vessels, high blood pressure, diabetes and respiratory diseases. He added that there is a fourteen percent incidence of diabetes among all segments of society, and 28 percent among the over 30s.

Furthermore, he said non-communicable diseases have become a serious problem in Saudi Arabia and worldwide, accounting for 60 percent of deaths across the globe, expected to rise to 73 percent by 2020.

Non-communicable diseases are those which are non-infectious and non-transmittable between people, such as heart disease, diabetes, kidney disease, and many cancers.

In a bid to tackle this rise, the Saudi government has established the General Directorate of Non-Communicable Diseases, through which is hopes to raise awareness among the community, and establish and promote integrated health care programmes.

Banyan Tree resorts seeks cash for UAE expansion

Asia’s Banyan Tree Hotels and Resorts is planning to expand its presence in the UAE in 2013 by establishing strategic partnerships with investors, the group said in a statement.

Banyan Tree Hotels Resorts CEO Abid Butt, who visited the emirates recently, said: “We are looking into various opportunities in the UAE to launch new hotels and resorts by forming new alliances and partnerships.

“The hospitality industry in the UAE in general, and Dubai and Abu Dhabi in particular, is witnessing increased growth supported by strong infrastructure and increasing interest in travel and tourism in the region which inspires us to look into various options to enhance our position in the country ,” he added.

The Banyan Tree Group manages and owns 30 resorts and hotels around the world, more than 60 integrated health clubs, 80 retail galleries and runs two golf courses.

It currently manages two hotels in the Middle East, Banyan Tree Al Wadi and Banyan Tree Ras Al Khaimah Beach.